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HMRC prolongs Contractor Loan Settlement Opportunity until June 2015

30th December 2014

HM Revenue and Customs (HMRC) has confirmed it has extended the lifetime of the Contractor Loan Settlement Opportunity (CLSO), a chance for contractors to own up to using an offshore tax avoidance scheme, until 30th June 2015.

The settlement opportunity was originally meant to be open until January 2015. HMRC has cited ‘exceptional reasons’ for extending the deal, however it won’t represent a ‘better deal’ than the initial CLSO which ‘we will not extend’ again.

HMRC’s vow came in a four-part update which indicated the reasons for extending the deal were due to popularity and user confusion and concern.

The update’s first part – focusing on issues raised in the CLSO’s first few months – appear to be the most relevant to contractors, some of whom will also need to read part two – IHT under the CLSO.

Nevertheless, all parts including part three on payment plans and part four on contacting HMRC, are designed to help contractors settle before tribunal action is required.

The first part of the update also addresses Accelerated Payment Notices (APN) which, if received by a contractor via the CLSO, must be paid within a 90-day window.

As a result, contractors that are currently ‘discussing’ settlement with HMRC’s CLSO staff must pay the sum or make representations in the timeframe or risk penalties.

The guidance for contractors says: “If you reach settlement … after the due date for payment of the accelerated payment, then the amount paid will be treated as a payment on account and offset against the final amount due.”

HMRC also states it will soon issue discovery assessments for CL scheme users for the 2010-11 tax year, and will hold a webinar in the near future for any contractor or agent unsure about the CLSO.